Thursday, December 16, 2010

What a weak dollar means to photonics

The dollar has been declining steadily again (see figure) but how much difference does it make to lasers and photonics? A lot to any salesperson who is competing in an export business. A falling dollar is like a discount in the price given to the buyer. And it can mean a lot to the value that we analysts assign to markets (such as in our new market estimate). For example, a falling dollar inflates the value in dollars of the production of Japanese blue-violet diode lasers for Blu-Ray players. But it doesn't mean a lot overall, for a lot of reasons. Why is that?

The conventional wisdom is that a falling dollar makes U.S. goods and services cheaper abroad, and foreign goods and services more expensive in the U.S. That is, it makes U.S. goods more competitive, and it deflates U.S. debt owed others as counted in foreign currency.

But many companies don't sell directly to companies abroad. A more complete downstream product may be exported by the customer's customer, but either way, the effect may be minimal--or at least obscure--to the photonics manufacturer.

Second, companies commonly import subcomponents from all over the world. A lower dollar then raises the cost to manufacture, erasing some or all of the advantages when it exports the complete product.

And, a lot of companies manufacture in the destination markets. This can help hedge against changes in currencies, among other things. In the example of Japanese blue-violet diode lasers, it changes the average prices and overall value, in dollars, that we assign to a market. But that can seem rather artificial when most of the Blu-Ray players are assembled in Asia anyway.

More often, the gains and losses from a falling dollar amount mostly to changes in market share: U.S. companies vs. non-U.S. companies, and U.S. importers vs. U.S. exporters.

For an explanation how a falling dollar is unlikely to create many new jobs in the U.S., read this article. It cites the reasons above, and notes that much of U.S. manufacturing is capital intensive, not labor-intensive. And, many manufacturers are small and not likely to ramp up hiring dramatically even if sales do improve.

Just the same, every little bit helps, especially if it means tipping a business from the red to the black or deeper into the black.

Monday, December 6, 2010

The new laser market numbers are out: $6.4 billion in 2010

The fall Laser Focus World survey is done and the estimate for the laser market in 2010 comes out to...(drum roll please)...$6.4 billion. That's a 27% gain over our revised value for 2009, recovering almost to the value in 2008 and not far from the peak in 2007. The strongest gains were in materials processing and communications.

A more complete picture will be presented, along with other market perspectives, at the annual Laser Focus World Marketplace Seminar in San Francisco, the same week as Photonics West.

Nearly every sector saw gains over 2009. But how could they not, considering the first half of 2009 was the worst period of the recession.

Nonetheless, the gains exceeded expectations, especially in the sectors related to electronics manufacturing: semiconductor fab tools, solar cell fab tools, flat panel fab tools, and electronics assembly tools. Let's hear it for smart phones and HDTV! China was also a big factor, buying tools at a time when other regions were more cautious.

And then there is the jobless recovery. Many manufacturers have cash and even credit, but remain wary about the future. Some chose to invest in capital equipment instead of hiring workers. The capital equipment improves the productivity, so it helps in their labor costs too.

It's worth a mention in this blog that historical values were significantly revised in two key sectors: excimer lasers for lithography and diode lasers for optical storage drives. These sectors are not relevant to most followers of the laser market numbers, but restating them does change the overall totals.

For more information, come to the seminar, or buy the complete forecast and segmentation in our market report.

Friday, November 5, 2010

Microsoft Kinect is a win for lasers and imaging

Bravo to Microsoft this week for launching a new market segment for lasers! The company finally launched the Kinect, a laser-based accessory that allows Xbox360 players to use their body as a remote control--gesture recognition. The lasers illuminate a field and an imaging system interprets it for the game console.

The reviews so far indicate that Microsoft is on to something here. It is a step up from the Nintendo Wii remote controller and way beyond the Sony PlayStation Eye, neither of which used laser projection to create the image. The main complaints so far seem to be that the Kinect is understandably a little clunky yet, and it doesn't work well in crowded spaces, like dorm rooms.

The system needs single-mode lasers to get a strong enough return signal to do the processing. But, they have to operate in the near-infrared to be invisible and at low enough average power to be eye safe. Kinect uses a structured light technique, which is to say that it interprets the distortion in an image created by the object. When the object moves, the field is distored accordingly.

The project was born as Project Natal, from two Israeli companies, Prime Sense and 3DV Systems. Microsoft bought 3DV in 2009, and this week it bought Canesta. Canesta is known for its laser-based 3D imaging system based on the time-of-flight technique. It works much like radar to recreate a 3D form. Years ago Canesta used the technique to read finger strokes on a virtual keyboard. It worked, and although I prefer an actual keyboard for touch typing, it may be useful as an alternative to touchscreens. The product is sold through a joint venture called Celluon, created in 2004.

The Kinect technique is less expensive than the Canesta approach. Maybe Microsoft has other plans for Canesta. Or it wants Canesta's expertise in imaging. Or maybe it wants to keep it away from competitors.

Any way you look at it this is all good news for lasers and imaging engineers. It's the beginning of a new market segment.

Friday, October 15, 2010

How the jobless recovery helps lasers

Several laser segments have recovered surprisingly well in this recession. This is after my warnings over the last two years that capital equipment markets take it especially hard in a recession. So what gives? Who needs new capital equipment when factories are running at lower capacity?

Enter the jobless recovery. Plant managers are talking about buying more efficient tools that operate more efficiently. In good times, this means buying a new tool to do more with the same staff. In recessions, this means buying a new tool to do more with less. Lasers play a role because they are used in big machine tools like sheet metal cutters.

Companies have cash. They are using it to buy back stock, buy capital equipment, and increase their reserves. What they're not doing is hiring workers.

There's a lot more to it than just the jobless recovery. There's the turnaround of the electronics industry after a two year slide. There's China. There are segments that are less sensitive to recessions. And so on.

But the jobless recovery explains why so much of the laser market is recovering as well as it is.

Thursday, September 9, 2010

Our new report: the time for mid-IR lasers has finally come

The time for mid-infrared lasers has finally come. Never mind that CO2 and certain mid-IR solid-state lasers have been around for years. But change is coming, with new solutions, new applications, and new companies.

We finally completed our masterwork on the subject, our market report on mid-IR lasers. We found that the new applications should grow 30% per year in coming years. What's exciting is that some new military applications are helping to develop new technologies while other applications in sensing can get some traction. And, there are new solutions in quantum cascade and interband cascade lasers, GaSb diode lasers and OPSLs, fiber lasers, solid-state lasers, and compact OPOs. Not to mention help from other innovations, like QEPAs, uncooled focal plane arrays, and hollow-core optical fibers.

Altogether, we counted over 50 companies selling lasers or OPOs and OPAs in the mid-IR range. Over half are headquartered in North America.

Of course it's not easy. Some applications are very challenging, and unraveling the technologies and the applications is messy. Not to brag, but we did a nice job in the report to unravel it all for you.

There's more going on with mid-IR market information. We worked with Robert Thornton of Ubiquilight in his survey of mid-IR laser needs. Please do the survey.

And, there will be a panel discussing the mid-IR market at the Laser Focus World Marketplace Seminar in January. To make it a little more direct, we're calling it "Quantum Cascade Lasers for Mid-IR Applications: Pro vs. Con." We will have Tim Day (Daylight Solutions), Robert Afzal (Lockheed Martin), Ken Kaufmann (Hamamatsu Photonics), Lars Hildebrandt (nanoplus), and me. The agenda will up shortly, if it isn't already. We hope to see you there.

Friday, July 16, 2010

What went wrong with GSI?

What’s going to happen to GSI? GSI announced in May that it would emerge from restructuring this summer. We got some interest this summer from investors checking out the laser market. One can imagine that some pieces of GSI will get traded. There will be news soon enough. As one of my smarter bosses used to say, “it will all become obvious” in due time.

The other question is, what went wrong? First, it got slammed in the downturn in the semiconductor and manufacturing sectors. Semiconductors turned down in 2007 and didn’t stop until last year. GSI is heavy into the semiconductor tool business, and it got hit hard. Equipment sales dropped as much as 90% or more from the peak. The rest of manufacturing turned down in 2008 with the recession. That business was hit with a 50% drop in equipment sales, plus or minus. That's brutal.

Second, GSI is really well positioned in lamp-pumped solid-state lasers, and it has a wide range of other laser and system products in many nice niches. But lamp-pumped lasers have been in a decline for several years while fiber lasers are on the rise. Lamp-pumped lasers won’t disappear, but it’s just not the place to be these days.

Finally, we’ve heard comments about certain decisions made by management along the way, particularly regarding the whole restatement thing. The gist of these comments is that the process was badly mishandled. It certainly made a bad situation worse, and it’s relevant enough. But, you expect Wall Street types to point that out first. They look at financial statements for a living.

To me, I take the macro, long-view perspective. The downturn came at great cost to companies and to the people who work in them. Some got caught out in the storm. Let’s hope that things work out for the best from here.

Thursday, June 24, 2010

Paying for the solar market

I don’t usually venture into solar energy discussions, even though it is also an opto technology. For one thing, it depends a lot on policy decisions and I've been there, done that once before. And there's already plenty written elsewhere. But it's worth pointing out Vinod Khosla’s recent posting on the requirements of investing in solar.

Khosla’s piece is long with detail, but he basically says that startups have to “be competitive with silicon cells at thin film costs or be competitive with III-V cells (well over 20 percent) at silicon costs. Then you have a 50/50 chance of making it. But a billion dollars of capital and billion dollars of debt will be hard to pay off.” A lot of is just basic market sense, and that's exactly the point.
Khosla echoes more or less what we have seen in solar for years. Strategies Unlimited followed the solar industry for decades while it had steady 25+% compound annual growth. (Don’t believe me? Check out the figure below.) Now that solar is finally in the public imagination, overinvestment has become a increasing concern.

Source: Strategies Unlimited and Paula Mints (Navigant Consulting).

I wrote already about the market for lasers needed for making thin-film cells (first here and the sequel here). My point then was that the cycle is amplified because it’s the “second derivative."

I worked on solar cells myself, back in 1978 at Texas Instruments. It's great to see it finally make the big time, and if oil prices go up, it will be even bigger. I'm hoping so. A lot of smart people are working on it. Great things are still to come.

Meanwhile, if you're following solar, read Khosla's piece, and read the comments, too. It makes interesting reading.

Friday, June 4, 2010

Time for customers to pony up

There was news this week that Morgenthaler Ventures is ending its track for funding opto hardware start-up companies, mostly in silicon, but including optical components. This is not good news, to be sure, but maybe it's time again for the systems integrators to finally pony up for components research.

The conventional wisdom here in Silicon Valley is that venture-backed start-up companies form the engine of innovation for industries. The venture capitalists are nice enough to invest piles of money in component research, with the hope that they'll make even bigger piles for their investors, when they sell the start-up to a Cisco or an IBM, or they take it public.

Trouble is, I don't know how many times I've heard the systems integrators complain that they need new opto technology now. Not next year, not next month. Now! And these are the companies that are getting decent profit margins, unlike the components suppliers (don't make me name names, please). Well, if this stuff is so darned vital, the systems vendors should be willing to pay big bucks for it, right?

The VCs aren't investing in optical communication components because they don't see the return in it. If things get bad enough, the integrators will have to take on more risk. If that becomes too expensive, maybe they didn't really need it today, or even tomorrow. My bet is that they do need it, but were happy to let someone else pay for the development.

The wild card is whether some Asian government, such as Korea or China, will fill the gap in funding and gain a permanent advantage in the components market. If you think that the venture financing model is driven by a herd mentality or is too narrowly focused to be effective, then that may well happen. But if you think that, for all of its faults, the VC model is mostly rational and market driven, then it's just China's money getting wasted, to the benefit of the systems vendors.

Tuesday, May 25, 2010

The brightest x-ray source in the Universe

What do you do with an aging linear accelerator? You use it to make an ultrafast free-electron hard x-ray laser, that’s what. And that laser is now the brightest x-ray source in the universe (so far as we know) and the only hard x-ray laser in the world. Where? At the SLAC National Accelerator Laboratory. At Stanford. It’s a national lab. Nice place, too.

Government labs love acronyms of acronyms, so the laser is called the Linac Coherent Light Source, or LCLS. Last month I was able to tour the new laser facility with the local IEEE Photonics Society chapter. It brought back flashbacks of grad school, but without the poverty. It’s a plush lab. For you laser geeks, here are some stats:

Pulse energy ~ 1 mJ
Pulse duration 5 to 200 fs
Peak power 10 GW
Average power 1 W
Repetition rate 120 Hz
Wavelength 0.1 to 10 nm
Electrical power bill per month: $ 1,000,000
Temperature control in beam delivery system: 0.01 degrees
Laser design: Self-amplified spontaneous emission (ASE)

The laser doesn’t sound that impressive, until you consider the infrastructure to build it. About 3 km of accelerator and beam delivery. A massive electrical bill to run the magnets and the air conditioning. A tunnel underground to keep the temperature stable (they used the same company to dig it that digs wine cellers in Napa Valley). The experiments are all done by remote control, just to ensure radiation safety. Not that they need to, with all the shielding and massive ground wires everywhere.

There is a great animation video that shows how it works, here. The electrons are accelerated to relativistic energies, then run through the free-electron laser, creating coherent hard x-rays. The rest is beam delivery. So, it’s just like your benchtop custom-built laser, but on a cosmic scale.

And what do they want to do with it? For one, it’s like a very fast x-ray camera that exists nowhere else on earth. It’s so fast, it can take diffraction images of crystals before the materials degrade from the x-rays. It can do pump-probe experiments on atoms and nuclei. It can reproduce the harsh environments in the universe by imparting a lot of energy into a very small volume. The SLAC SCLS aims a stream of x-rays at a small spot size, creating a huge intensity. (The new Livermore NIF laser also creates x-rays at the target, but they go in all directions. The NIF laser produces higher energy pulses, for fusion reaction.)

You can drive over the accelerator on Interstate 280, just near Sand Hill Road, near Stanford’s radio telescope and open cattle range. But you can’t just drive onto the SLAC national lab campus. There’s a guard. And anyway, the laser and beam delivery is all underground.

Monday, May 10, 2010

The numbers are in: $8.8B by 2014

We've finalized the 2010 edition of our laser report, and it's official: a 25% decline in the market for 2009, but still among the top 6 years in terms of revenue. And, everything from here is up, with about 9% growth to $8.8 billion in 2014. Some of you saw the draft in March, after the Q4 numbers came in. Here is the chart:

Fiber lasers are doing well, under the circumstances. Our estimate for fiber lasers came out a little higher than many people expected, including us. We recorded a decline of only 5% overall, to $280 million. IPG took a big hit in 2009, returning to its 2007 level. This is because it is strong in kilowatt fiber lasers. (Other kilowatt laser companies were hit even worse, like Rofin-Sinar and TRUMPF, for the same reason.)

But there are several smaller fiber laser suppliers that are selling into various applications from Europe to China. Two very promising sectors are medical systems and military projects. True, one could exclude some of those military projects from a count of the market, but it shows up as revenue to companies so we include them.

No shopping sprees. Another surprise is that, so far, there haven't been as many acquisitions as one might expect. This is partly due to the tight credit and the uncertainty that weighed on the market last year. There has been consolidation of other kinds, just not the kind of shopping spree that sometimes accompanies downturns.

More coverage. This year, we extended the coverage of the laser market report to include every major market, beyond fiber lasers, beyond even industrial lasers. It now has everything that the annual Laser Focus survey covers, but with the most updated data, forecasts to 2014, and 300 pages of detail not provided in the January issue of the magazine or the January seminar. (Disclaimer: our numbers also continue to differ in some key places from the LFW numbers due to differences in segmentation.)

Friday, April 30, 2010

Pecha Kucha 20x20

Ever wondered why techie presentations are so notoriously bad? You think, am I the only one who's bored or confused? Well, check out this completely new way of doing presentations. I've seen it and it's a breath of fresh air.

First of all, you know what kind of bad presentations I'm talking about, don't you? Presenters who assume you love their narrow topic. They have too much detail. The print is too small. Equations that you can't follow. Monotone voice. Wooden statue posture. A nervous laser pointer flitting across the screen. We're all guilty, and sure, photonics is supposed to be technical. But do so many presentations have to be so bad?

Well, there's a new way of presenting called Pecha Kucha 20x20. It's very simple. You present 20 slides with 20 seconds each. That's about 7 minutes. During that time, you can't ask questions--questions come after (sorry, Intel employees). You have to get through your main points fast, like an elevator speech.

I've seen it and it gets to the point. It cuts the bull. It's great for those small-ish sessions: internal company meetings, B-to-B briefings, that sort of thing.

It started in Japan as a social event in 2003 as a way for architects and other designers to network without boring everyone. It spread to cities all over the world. The subjects can include anything. There's now also a group called Ignite in the U.S. that is doing kind of the same thing, for fun. Imagine.

Using it as a social scene does sound a bit geeky. After working in the tech industry all day, the last thing you might want to do is to go listen to more Power Point presentations, even if they use 20x20. But, it's kind of the modern equivalent of Toastmasters. Or salons. Or speed dating. That might be fun after all.

Spread the word. Managers, start using 20x20 in your meetings. Salespeople, use it in your sales calls. Engineers, use it in your presentations, and leave the other slides as backup for the Q&A. Don't be afraid to try it. Think Pecha Kucha 20x20.

Friday, April 23, 2010

IPG makes moves

IPG seemed to make a vertical move into machine tools this week, with its announcement that it acquired Cosytronic. Well, it turns out that it’s not exactly a vertical move. In fact, it’s a pretty narrow acquisition, but an interesting one. Where does this put IPG on the longer term roadmap?

IPG has done well so far in kilowatt lasers, selling mainly to systems integrators for metal welding. But the huge majority of welders use good old-fashioned electrical welders, not laser welders.

IPG aims to change that. Cosytronic has 20-some years of experience in resistance welding, from the “Welding Valley” in Germany. It has a tool that can make seam welds with a laser head that swaps with the head of a resistance spot welder. The aim here isn’t to take on resistance spot welders. The aim is to increase the pie for laser welding. For IPG, it’s about the application, not making systems per se.

I should mention that IPG's main competitor, TRUMPF, aims to do the same thing, of course. But TRUMPF has a machine tool business and lots of internal expertise. IPG is working on that.

It’s a very different story in sheet metal cutting, by the way. That is the grand prize in materials processing. But, several big tool vendors make their own CO2 resonators for their tools, or have loyal relationships with independent suppliers of resonators, mainly Rofin and Fanuc. It’s hard for a new player to break in with a new type of laser. Nonetheless, IPG is making progress there too. IPG plans to continue to work with the systems integrators to gain share in that segment, rather that to make a vertical move.

This is IPG's 2nd acquisition in 2010, by the way. It acquired little-known Photonics Innovations, of Alabama, in January. That acquisition is also narrowly strategic, aiming at materials and the mid-IR range.

Friday, April 9, 2010

Why Net Neutrality is above your job grade

As a supplier in the photonics or telecom food chain, should you care about the landmark decision this week over the FCC vs. Comcast? In short, no. It’s above your job grade. Here’s why.

Much is made about this kind of thing at the carrier level, since it impacts how they do their business. And what the carriers do—who wins and who loses—impacts the optical equipment vendors. And that passes on to the component vendors, who win or lose depending on their customers . So far, that’s all true.

But these kinds of decisions are really for policy wonks and legal nerds. I know, because I’m a recovering wonk myself. I once worked on telecom policy for Congress.

It’s not that technologists are above policy issues, or have nothing to contribute. Technologists are notoriously aloof in policy debates, but badly needed.

Rather, the neutrality debate is irrelevant to the optical networking community because it’s mostly decoupled from the day to day business of the network. There are so many other factors that are also very important. Think of the 50 states and the District of Columbia. Each has a regulatory agency. There are municipal agencies. Federal courts. The FCC. Congress. European countries. The European Commission. Japan. China. India. And a hundred other countries. Think of Google, iPhones, Facebook, Youtube. Think of refrigerators with IP addresses. (Then again, let’s leave that out.)

While policies get worked out, traffic just keeps on going up and up. And no one really has a good grasp just exactly how fast the traffic is growing, much less how much it will grow in the future. And even when big policy decisions are made, the consequences take years to work out. There will be more appeals, reactions by competitors, possibly legislation.

It’s important to take an interest in Net Neutrality as a citizen. It’s about whether you think broadband service should be a regulated utility, or if it should be a competitive service. And yes, the consequences do trickle down to the equipment and component vendors. But the ones who stand to gain the most from these debates? Lawyers and government affairs officers (also known as lobbyists). That’s a certainty.

Friday, March 26, 2010

Fragmentation depends on your point of view

A recent poster on the Photonics LinkedIn group was impressed by the stratification and fragmentation in the HB-LED business. The self-described newcomer can be excused for being naïve, but there are some things I think are worth repeating here. Most importantly, whether fragmentation is good or bad depends on where you sit.

A lot of people like to compare photonics with some industry X just before the industry took off. The most common example is silicon electronics in some early stage. Who wouldn’t want to repeat that ride?

But that’s a poor analogy. Photonics components are more like airplane parts than CMOS. Most photonics parts are highly specialized, and the suppliers can often make a nice profit because of the complexity or service they provide. That's good for a lot of companies, including small and medium size companies. For them, fragmentation is good. It means niche opportunities for them.

However, it turns out that a lot of photonics parts require an expensive clean room—a fab. Anyone who has an expensive capital investment, like a fab, wants to get volume through it to pay for the lights, and that favors consolidation. These suppliers want everyone else to get out of the business and leave it to them. Who wouldn’t? So, many of these companies look to minimize differences in products, even if it means standardizing the parts a little and giving up some of the profit margin. For them, fragmentation is bad because it limits their volume, and therefore their profitability.

If you are a customer or an end-user, there is occasionally a segment where consolidation is needed to lower the price to the customer, and move the market forward. But these opportunities are rare. When they appear, the customers usually have a way of forcing standardization onto the suppliers, not the other way around. Solid-state lighting might be an example where consolidation might help the end-user. (Or not, since it's not the only factor in its adoption.)

But watch out what you wish for. What's good for the customer, or for one supplier, may not be good for everyone. Whether the consolidation is good or bad depends on whether you survive the shake-out or not.

In summary:
* Photonics markets are notoriously fragmented.
* They always will be.
* That’s good for some companies.
* That’s bad for some companies.
* Consolidating suppliers can sometimes help grow the industry, but watch out what you wish for.

Tuesday, March 2, 2010

3 countries make 87% of all lasers. Wow!

Bet you didn't know this: about 87% of all laser revenues attribute to companies headquartered in only three countries: the U.S., Japan, and Germany. Wow! Who'd have guessed?

Don't believe me? Consider that about 1/2 of all laser revenues are for diode lasers for communications and optical storage. These are mostly made by Japanese companies, some U.S., some Taiwan, and a few others.

Then, consider that several big laser makers hail from Germany and Japan: TRUMPF, Rofin-Sinar, FANUC, Gigaphoton, and Mitsubishi. Germany is also home to many smaller laser makers, like Jenoptik, Toptica, and (despite the name) Menlo Systems. The U.S. is the official home to many familiar names: Coherent, GSI (including Synrad, Quantronix, and Continuum), Newport, IPG, Cymer, JDS Uniphase, Oclaro, and many, many smaller companies.

I'm counting revenues here, not units. A lot of commodity lasers are made in Taiwan, or even China, for laser pointers and such things. Oh, and of course, I'm talking just the laser, not the system or end-use.

True, the assembly may be anywhere from Russia to China, but the companies are headquartered in only a few countries. This means that at least a large part of the revenues (including the profits) flow back through headquarters. (More on that in a later post.) Oh, and of course I'm talking just the laser, not the system or end-use.

For the record, this all came about from a question I got from Breck Hitz, the Executive Director of the Lasers and Electro-Optics Manufacturers Association, LEOMA, who is trying to advance laser standards at the ISO.

Thursday, February 18, 2010

SIL 2010: HB-LED market to grow 53% this year

Our 11th annual Strategies in Light event ended last week and it was symbolic of the LED and LED lighting market. Booming. In fact, the big takeaway is exactly that. The HB-LED market will surge 53% in 2010 to $8.2 billion, going to $20.2 billion by 2014. Did you get that? That’s $20 billion. That's a respectable number compared to other components sectors, like semiconductors and displays. And, it grew 5% in 2009, despite the recession.

This is so big, saying much else takes away from the message. And anyway, my colleagues at LEDs Magazine were all over the event, so you can go there to find out the details. You might especially like this chart of our LED market forecast, at the magazine’s site.

The event was a indication of the expectations in the LED market. We had nearly 3,000 total attendees and 88 exhibitors, each up about 50% from 2009.

The LED lighting part of the event is really gaining mindshare, with its separate conference track, LED lighting tutorials, a new Solid-State Lighting Investors Forum, and a new LED Lighting pavilion in the exhibit area. There was also a lot of discussion about broader systems issues like LED-specific thermal management, suitable optics, efficient drivers, LED-friendly controllers, and all that. In short, it’s not just about the LED anymore.

Monday, February 8, 2010

The next big imaging technology: OMI

If you haven’t heard of optical molecular imaging (OMI), get ready to hear more about it. OMI is about to move into clinical use as one of the key tools in personalized medicine. Growth of equipment sales is on track to reach $400 million in 2014 and nearly $1 billion by 2020. Yes, you heard that right.

Don’t confuse this new imaging technology with OCT (on which we also have a new market report). Think of optical molecular imaging more like CT or MRI, but using visible light emission from molecular agents. OMI can be used in living tissue as a tool for examining diseases or drug effectiveness. It’s highly portable, fast, and less expensive than conventional imaging, and it has the potential to be used in the doctor’s office.

There are a lot of factors in this market rollout, though. The growth hinges on partnerships with key medical equipment vendors, the outcomes of clinical trials assessing imaging agents, regulatory approvals, patent litigation, and decisions about insurance reimbursement.

The market will likely expand in two directions: research systems and clinical systems. Recent advances in imaging agents will power the transition of optical techniques from the lab to clinical settings. Large imaging firms, such as GE Healthcare, Siemens, and Philips, are beginning to pursue optical molecular imaging, while over 12 companies are already marketing OMI systems. A large part of the revenues will be from the imaging agents, animal models (that is, genetically-engineered mice), accessories, software, services, and licensing.

As always, ours is a high quality market report, and the only comprehensive one out there. Kudos to our good friend and lead author, Susan Reiss.

Friday, January 29, 2010

Photonics West--what theatrics and so not 2009

I don't know if it's the new Moscone Center venue, the laser show at the conference reception, or the fact that this is 2010, not 2009, but Photonics West was really booming this year. And the statistics say it all: over 18,000 visitors, a new record. That is now more than Semicon West, in both visitors and booths. (Don't believe me? Check here.)

First, there was the venue. San Francisco is more expensive, and a lot of us locals have easier access getting in and out of San Jose. But there was a classier feel to the show this year. It's like Photonics West moved to a major league ballpark. And the vendors that were formerly in the tents in San Jose must have felt a lot better getting equal traffic at Moscone. At least the roof wasn't leaking on the rainy days like before.

Then there were the theatrics. SPIE put on a great reception, with Cirque performers, old clips of lasers from James Bond, and a laser magic show. There was a great exhibit of old lasers in the North Hall. And it helped that Apple unveiled its iPad on Wednesday on the same block. If you go out to a restaurant, you are more likely to recognize someone in San Jose and less likely to encounter panhandlers, but San Francisco has more stuff happening.

And finally, there was the economy. The feeling was that if you showed up, that's already an achievement. 2009 was a terrible year, but companies responded to the recession quickly, and the market seems to have bottomed out in mid- to late-2009. This time last year the market was still in decline. We were still looking at the abyss. Now, while visibility is still poor, the most likely scenario is modest growth from the new low, plus or minus in either direction a little.

Photonics West is about product development, which still must go on even during recessions. Conference highlights were: OCT imaging, molecular imaging, or for that matter, anything combining bio and imaging. In fact, BiOS was booming. Also mid-infrared, quantum cascade lasers, and terahertz.

On the show side, I have to say that there wasn't anything that struck me as especially new this year. But then again, the Photonics West show is all about nuts and bolts, so it's hard to stand out in the middle of all that.

I also got to tour the National Ignition Facility on Thursday, which is something any laser engineer should see. But, I'll get to that another day.